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This paper sheds light on key innovation patterns and constraints within a selected set of developing East Asian countries (Cambodia, China, Indonesia, the Lao People's Democratic Republic, Malaysia, Myanmar, the Philippines, Thailand, and Vietnam). It follows a comprehensive approach about national innovation systems while highlighting the supply and demand dimensions of innovation as well as the markets where firms make accumulation decisions for different forms of capital (knowledge capital, human capital. and physical capital). The paper presents a set of empirical exercises drawing from various data sets. The results corroborate the idea of the importance of adopting a broad view of innovation policy and investing in missing complementary factors. Although investment in research and development is key to boost innovation, it is also crucial to have business and regulatory environments that are conducive to overall firm performance and capital accumulation (not only knowledge capital), as they are expected to improve innovation returns. In addition, the results suggest that other innovation inputs aside from research and development matter for innovation activities, such as training for innovative activities, acquisition/licensing of technology, and managerial practices.

Business cycles and stabilization policies --- Business environment --- Common carriers industry --- Construction industry --- Educational sciences --- Food and beverage industry --- General manufacturing --- Innovation --- International economics and trade --- International trade and trade rules --- Managerial practices --- National innovation systems --- Plastics and rubber industry --- Private sector development --- Public sector development --- Public sector management and reform --- Pulp and paper industry --- Textiles apparel and leather industry

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Convergence of productivity of Czech firms towards peer countries is slow, especially for smaller firms. Czech labor productivity was 68.3 of that in Germany and the productivity gap is in particular large for micro, small and medium enterprises (MSMEs). MSMEs (defined as having less than 250 employees) form the backbone of the Czech economy, accounting for 67.3percent of total employment and 55.2 percent of value added (at factor cost) but face weak innovation demand and an unfavorable position in global value chains. The Czech Ministry of Industry and Trade (MIT) is developing a new Small and Medium Enterprise (SME) Strategy and Implementation Plan for the period 2021-202no7 to boost firm productivity and competitiveness of domestic SMEs. MIT has requested support from the European Commission under Regulation (EU) 2017/825 on the establishment of the Structural Reform Support Programme ("SRSP Regulation"). The request has been analyzed by the European Commission in accordance with the criteria and principles referred to in Article 7(2) of the SRSP Regulation, following which the European Commission has agreed to provide technical support to the Czech Republic, together with the World Bank, to conduct analytical work on the status of SMEs.

Innovation --- Private Sector Development --- Private Sector Economics --- Science and Technology Development